When you hear the word fuel, the word “oil” probably immediately comes to mind. For years, oil has been the dominant transportation fuel, but according to a new report by the firm Lux Research, the market is beginning to shift away from the commodity. Read more →

Over the last month, the following incidents have taken place in the Middle East:

On July 4, a car bomb exploded in a crowded market in Baghdad, killing nine people and injuring 24. Although no one took credit for the attack, suspicion fell on ISIS, which had been responsible for previous bombings in Baghdad. The incident was described as one of the deadliest in recent memory.

On July 12, a series of car bombs and suicide attacks killed 35 people and injured more than 100, mainly in Shi’ite neighborhoods. In the deadliest attack in the northern Shaab neighborhood, a car bomb exploded and then a suicide bomber detonated another explosion once police and crowds had gathered at the scene of the first explosion. Once again, ISIS was believed to be responsible. The incident was described as the deadliest in recent memory.

On July 18, a truck loaded with explosives was detonated in a busy Baghdad market, killing 120 and wounding 130. The explosion occurred while the local populace was celebrating the festival of Eid al-Fitr, which marks the end of the monthlong Ramadan holiday. The explosion destroyed 50 stores and 75 cars, and leveled two buildings. It was said to be the worst incident so far this year.

A month earlier, terrorists struck in France, Tunisia and Kuwait on the same day, June 26. No one knows whether the events were coordinated or just occurred by coincidence. In Kuwait, an explosion at a Shi’ite mosque killed 25 worshippers and destroyed the mosque. In Tunisia on the same day, a lone gunman wielding an assault rifle killed 38 people, mostly tourists, on a public beach. ISIS claimed credit for both incidents, although it did not say they had been coordinated. In France, a lone terrorist made it past security at an American-owned chemical factory, set off a gas explosion, and then decapitated a company executive and posted his head on a gate next to two Muslim flags. At the beginning of the holy month, Abu Mohammed al-Adnani, a spokesman for ISIS, had exhorted his followers: “Muslims, embark and hasten toward jihad. O mujahedeen everywhere, rush and go to make Ramadan a month of disasters for the infidels.”

Many American think all this violence started with the U.S. invasion of Iraq in 2003. In fact, it’s been going on since the 7th century. The original argument began with the succession to Muhammad’s leadership when he died in 632 A.D. There were two claimants to his legacy. The first was the Umayyad Caliph, made up of the followers of Muhammad’s entourage in Medina and Baghdad. The second was Hussein, the grandson of Muhammad, who claimed to be his legitimate heir.

In 680, Caliph Muawiyah I of the Umayyad died and tried to pass his rule on to his son, Yazid, despite a written agreement with Hussein to honor his claim to the throne. Yazid demanded that Hussein acknowledge his rulership, and Hussein refused. Instead, he mounted an army and headed toward Baghdad, where Yazid was seated. During the march, however, Hussein’s supporters dwindled, and when he arrived at Karbala, about 50 miles south of Baghdad, he only had 75 followers left. There he was met by an army of 1,000 men sent forth from Baghdad by Yazid.

Hussein deliberated for a week before deciding once again to refuse Yazid’s leadership and join him in battle. By this time, Yazid’s army had swelled to 6,000. Hussein went to battle with about 75. Hussein’s army was slaughtered, and he was himself beheaded and his head sent to Baghdad. Hussein’s followers set up a rival caliphate in Medina, however, and the schism between the Sunni Umayyad Empire and the rival Shi’ites began and continues to this day.

The Shi’ia, who eventually established their dominion in Persia (Iran), still celebrate the holiday of Ashura, in which they flagellate themselves because they were not there to help Hussein at the Battle of Karbala. As one scholar has put it, the Shi’ia are “born martyrs.” Iran is the one country you can imagine starting a nuclear war, even if it meant nuclear suicide.

All this would be only of antiquarian interest if it were not that more than half the world’s oil comes from the Persian Gulf. And all that oil is continually riding on the chance that the two sides will not disrupt the flow of oil — or destroy whole oil fields — in their endless, ongoing battles. The stakes are only getting higher. Last week, ISIS rebels in the Sinai Peninsula claimed to have hit an Egyptian naval vessel with a guided missile offshore in the Mediterranean. How long will it be before rival factions are firing guided missiles at oil tankers sailing through the Strait of Hormuz?

It is impossible to choose sides in the Middle East. For instance, ever since the 9/11 attack, the United States has considered al-Qaeda to be its prime adversary in the world. Yet last week, Americans found themselves on the same side as al-Qaeda in backing Saudi Arabia’s efforts to expel the Shi’ite Houthi rebels from Yemen. Yet at the very same time, we were negotiating a nuclear agreement with Iran that is widely perceived as supporting the Shi’ite faction in the Middle East, in defiance of Sunni Saudi Arabia. The Saudis have said they may seek a nuclear weapon themselves if Iran is able to secure one. Imagine a nuclear-armed Iran and Saudi Arabia facing each other across the Persian Gulf while our oil tankers try to escape into the Indian Ocean.

The only reasonable strategy here is to reduce our dependence on Persian Gulf oil. We still import 20 percent of our oil from the Persian Gulf, with 13 percent coming from Saudi Arabia. This is down from over 30 percent a decade ago, but we can still go further. America’s amazing improvement in oil production has played a part, but we are still dependent on oil for 80 percent of our transport sector. Substituting other kinds of fuels to power our vehicles is the obvious answer.

The Middle East tinder box isn’t going to go away during our lifetime. The obvious solution is to disassociate ourselves as much as possible. Freeing ourselves from our dependence on oil for our transport sector is the first and foremost step forward.

One of the many fascinating storylines in the documentary PUMP (which is now available for download on iTunes) is the yarn about how several companies got together to take on a common enemy: popular, affordable electric trains and trolleys that criss-crossed the nation early in the 20th century. That’s a very different country than we live in today, when the automobile is as ingrained in our culture and economy as ever. As former Shell Oil president John Hofmeister puts it in the film:

“We live in a society in which we rely on personal mobility as the primary means of transportation. And there’s no public transportation system to rely upon in the United States of America as an alternative to high prices or shortages.”

Narrator Jason Bateman follows up:

“America wasn’t always without transportation choices. Once upon a time, we had the best and cheapest public transportation in the world.”

Bateman then gives way to an expert on this subject, Edwin Black, whose book Internal Combustion details the effort to target the trolleys. Black explains in PUMP:

“People loved the trolleys. They could hop off, they could hop on … all the trolleys ran on electricity. It was said that you could go from San Diego to New York City on a trolley just by transferring, transferring and transferring.”

In the 1930s and ’40s, five companies — Standard Oil, Mack Truck, Firestone, Phillips and General Motors — colluded to create a secret company that bought up all the trolley lines and passenger cars.

“… the rails were pulled up, the trolley cars themselves were burned in public bonfires [as seen in the photo above], and they replaced them with smelly, oil-consuming motor buses. Eventually, the federal government discovered that this was a conspiracy to subvert mass transit. All five corporations were indicted, they were tried, they were found guilty. A corporate conspiracy was responsible for destroying the trolleys in America.”

The reckoning was a little late, however. Back to Bateman:

“With cheap public electric transportation eliminated by oil and car companies, the vision of America’s future switched from rails to roads.”

That led to the interstate highway system, which only intensified our love affair with the automobile. A relationship that relies, essentially, on just one fuel type: gasoline. Of course, many of today’s municipal bus fleets run on compressed natural gas (CNG) or liquefied natural gas (LNG). And rail projects are often on the minds of planners. But getting away from gas-burning transport has been a difficult road, as anyone following the fight over California’s $68 billion high-speed rail project knows. To get a sense of how the story of oil’s dominance came to, and to see what you can do to end our addiction to it, watch PUMP. (Photo credit: Submarine Deluxe)

Lane Kelley of ICIS Chemical Business calls it “methanol mania” and he probably wasn’t exaggerating. Last week Texas and Louisiana underwent an explosion of activity, promising to turn the region into a world center for methanol.

Earlier this month, Louisiana Gov. Bobby Jindal announced that Castleton Commodities International LLC (CCI), a Connecticut firm, will be building a $1.2 billion methanol manufacturing plant on the Mississippi River in Plaquemines Parish. The plant is expected to produce $1.8 million tons of methanol a year.

“This plant will help our children stay in Louisiana instead of leaving the state to find jobs,” said Jindal. “My number one priority it to make Louisiana a business friendly place.”

But that’s not even half of it. The Environmental Protection Administration (EPA) just gave its final approval to a $1 billion methanol plant to be built near Beaumont, Texas. The facility will be operated by Natgasoline LLC, a subsidiary of a Netherlands-based company that already employs 72,000 people in 35 countries. It will employ thousands of construction workers and carry a $20 million payroll when it begins operating in of 2016.

Does that sound like a lot? Well, don’t forget Methanex Corporation, the country’s largest manufacturer of methanol, is in the process of moving two plants back from Chile to Louisiana. One plant is scheduled to open in a few months. And ZEEP (Zero Emissions Energy Plants), an Austin-based company, has just raised $1 million for a proposed plant in St. James Parish, La.

Does that sound like a full plate? Well, it’s still just the beginning. The Connell Group, a government-supported operation, announced long-range plans for what would be the largest methanol plant in the world — even if only half it gets built. The first unit, located in either Texas or Louisiana, would produce 3.6 million tons a year, twice the current world record holder in Trinidad. Together, the two units would produce more than the current U.S. demand, 6.3 million tons a year. The term “Gigafactory” soon may be standard vocabulary.

So what’s going on? Well, the plan is for nearly all this Texas and Louisiana methanol production to be exported to China. The widening of the Panama Canal for supertankers, scheduled to be completed in early 2016, will be a bit part of the puzzle. Believe it or not, China also has plans to build three more plants in Oregon and Washington. But they run into trouble there, of the West Coast’s dislike of fossil fuels.

So China is planning to use American natural gas as a substitute for its own coal, in producing large amounts of methanol. It’s no different from the Chinese buying up farmland in Brazil and Ukraine in order to grow crops.

But the Chinese have other things in mind as well. Zhejiang Geely Holding Group Co., Ltd, Chery International, Shanghai Maple Guorun Automobile Co., Ltd. and Shanghai Automotive Industry Corp. all produce methanol-adaptive cars, which now accounts for eight percent of China’s fuel consumption. Israel is also experimenting with methanol from natural gas as a substitute for imported oil.

Methanol produces only 50 percent of the energy of gasoline, but its higher octane rating brings it up into the 65 percent range. It produces 40 percent less carbon dioxide and other pollutants and would go a long way toward helping China improve its pollution problems. As far as methanol production is concerned, China sees only see an upside.

So what’s going on in this country? Well, so far we have the world’s largest reserves of natural gas, we are on the verge of becoming a world center methanol manufacturer — yet we still have a set of rules and regulations and sheer inertia that prevent us from powering our cars with methanol. For some strange reason, the United States is about to become a world center for the production of methanol, yet we still haven’t figured out how to put it to one of its best uses.

PUMP is an inspiring, eye-opening documentary that tells the story of America’s addiction to oil, from its corporate conspiracy beginnings to its current monopoly today, and explains clearly and simply how we can end it – and finally win choice at the pump.

While many are breathlessly waiting for liquefied natural gas (LNG) exports from the United States to begin in 2015, there’s a natural gas export boom already happening right under the noses of most investors. I’m talking about rapidly growing gas exports from the United States to our southern neighbor, Mexico. LNG exports, which are travelling via pipeline, are at their highest levels ever and growing.

France currently grants new car buyers a credit of 6,300 euros ($8,400) if they purchase an electric vehicle. But if a new bill submitted to Parliament by France’s Minister for Ecology, Sustainable Development and Energy is approved, customers will be eligible for an additional bonus of 10,000 euros if they switch from a diesel powered vehicle to an electric one. That’s a total of 16,300 Euros or about $22,000.